Set your kids up for success with money

How do you set your kids up for success with money?

It sounds so difficult, right? To get your kids to have a good successful relationship with money is really not that difficult. Talk with them about how much things cost. You don’t have to explain to them how much money you make if that is an issue. But talk to them about how many hours one has to work to pay for things. Let them know money isn’t endless. It has a beginning and an end. It only goes so far. Being real with children sets them up for understanding that money goes for things you see and things you don’t see.

Not only do we have to buy groceries but we also pay for things they might not understand. We pay for lights. We pay for insurance. We pay for car maintenance. We pay for braces. We pay for so many things and our money only goes so far. We used to eat out a lot. In the last year we’ve cut out eating out and we even cut out cable. The kids miss it occassionally and I’ll admit I do too. However we did that so we can afford their after school activities. Kids need to know that we sometimes cut back to make room for other things in our life. TV and eating out just wasn’t one of them anymore. We use our fire stick and roku and we’re perfectly content without having 8000 channels.

Being real with kids is good for them. But do it on their level. You don’t want to tell a 2 year old that you have to work 7 hours to buy xyz. When they were younger I just said it wasn’t in the budget. But you can explain that to the older kids. We talk like this to our 11, 14 and 20 year old. It lets them know that yes we have money but our money works. It works for us in ways you see and in ways you don’t. You don’t think about making sure the lawn mower is in working order until right before summer. But you have to be prepared to spend money to save money. If that means fixing the lawn mower that saves you from paying someone to do it for you then that’s what you do.

It’s never to early to set realistic expectations about money. The kids have to understand that it’s not always about them. Sometimes it’s about what that money is earmarked for. Show them your budget each month. Help them see that yes money comes in but that money goes out just as quickly. The quickest way I can determine if an item the kids are wanting is a need or a want is to ask them to spend their own money on it. All of a sudden they don’t really want it that bad.

If they can learn to delay spending their money then they are going to have success with it as an adult.

I had the credit card discussion when my oldest was in high school. Credit is good but only when used correctly. It’s so much better to pay for everything you have with cash if possible. Credit cards are not the best use of your money because most people don’t have the commitment to pay it off every month. For right now my oldest still doesn’t have a credit card. He’ll probably need to get one eventually to build his credit. I hope when that time comes we’ve done our job and he learns and pays it off each month. I hope he doesn’t make the mistakes we made when we were young and first married. What have you done to help your kids understand and have success with money?